The Value of being a Data-driven Organization
By Brad Horling, Director of Business Intelligence
In recent years, we have witnessed a huge shift in recognition around the importance of data as an asset. As the world undergoes a digital transformation, the seemingly small details of our lives are tracked, recorded, and leveraged as data points to make decisions. This cascade of information is growing at a rapid rate, creating innumerable opportunities for organizations to innovate and better serve customers and clients.
Organizations that can capitalize on these opportunities are able to challenge industry competitors that may have been in the market before them, forcing these competitors to rethink their business strategies and viability. Ultimately, being "data-driven" can lead to a competitive advantage and allow an organization to generate long-term value for itself and for its customers.
What is a data-driven organization?
Simply put, a data-driven organization has three main characteristics. These characteristics are:
A proven history of acting and making decisions based on data insights, rather than gut feel or intuition.
These organizations do not produce numbers and figures that allow room for subjective judgement in the decision-making process. Instead, data-driven organizations develop business questions that can be tested and whose explicit answers provide reference points and appropriate context. Such insights can then be used as the basis for objective decision-making.
A consistent focus on raising the data literacy level of ALL employees, building an enterprise-wide culture of data utilization and information sharing.
The responsibility of data literacy should not fall on one individual who may be considered the “data specialist.” Instead, data-driven organizations encourage each employee to use analytical thinking in their decision-making. In addition, the organization may identify analytical leaders in each core business domain to enhance and maintain the culture of the organization.
A strategy to invest (both financially and with human capital) in the development of data and analytics that improve or support the organization's core competencies and business operations.
Being data-driven does not mean that an organization must sell its intellectual property or developed data technologies as a service. At the lowest level, its analytics must be narrow or targeted in scope and managed at an enterprise level. Data-driven organizations implement processes and governance that consider the organization as a whole and not just select departments.
What are the benefits of being a data-driven organization?
At Emtiro Health, we leverage data to drive proactive and ongoing measurement of all key operations and activities pertaining to the all the services we deliver. Amidst a volatile and changing Healthcare Industry, we remain committed to our approach, due in part to the benefits we have received from our investment. We’ve listed a few of these key benefits below.
Benefit #1: Informed and Accurate Decision-making
When the time comes to make critical decisions, whether proactive or reactive, humans consistently use subjective reasoning, anecdotal thinking, and intuition. However, we must recognize our intuition can be full of biases. For example:
Confirmation bias: we seek information that reinforces our beliefs and we tend to ignore information contrary to our views.
Correlation vs causation: we are quick to determine causation, which in reality relies heavily on statistical analysis and structured, well-developed inference.
Substitution bias: when presented with a difficult, complex question that requires deep thought and reasoning, we substitute it with a simpler, easier to answer question.
Availability bias: information that is more 'available' to us affects our decision-making. For example, a plane crash covered in media leads to individuals questioning the safety of flying (while the likelihood of a plane crash hasn’t changed with any significance).
Data-driven organizations eat, sleep, and breathe the idea that it is better to know than to think or feel. When situations arise that require difficult decisions to be made, data-driven organizations limit the biases listed above by intentionally challenging their thoughts and beliefs. Sometimes, this is as simple as asking, “What does the data say?” It is also common for data-driven organizations to implement feedback loops that validate their assumptions and allow for learning at a fast and furious pace.
Benefit #2: Improved Organizational Agility
Informed decisions can be made only as fast as meaningful insight and information can be derived. Data-driven organizations invest in the right people, infrastructure, and governance processes to enable widespread utilization of enterprise data. With the right infrastructure in place, analysts spend less time manually hunting-down, compiling, and cleaning data and more time generating insights.
Additionally, when information is made widely available to highly data-literate contributors at all levels of the organization, the insight generation process becomes decentralized. This limits the bottleneck of a single analytics department or group and allows businesses to answer questions as they arise. By shortening the decision cycle time, organizations become more agile and responsive to their markets and changing business environment.
Benefit #3: Improved Efficiency and Effectiveness
When data and analytics are targeted to support and improve an organization’s core competencies or business functions, opportunities to gain efficiency and effectiveness arise. This is independent of whether an organization sells services, products, or insights to a market.
Not only do targeted analytics provide insight for decision-making, they can move an organization’s operations to a higher level. In a world where technology is easy to copy, innovation is difficult to diffuse, and there are minimal (if any) advantages available to organizations based on geographic location, organizations must differentiate based on efficiency and effectiveness to remain viable. Consider Amazon.com as an example. At its core, Amazon provides distribution services for multiple industries (retail, media, digital content, and entertainment). Over time, Amazon has invested in analytics that are specifically targeted to support and improve their distribution channels. In the very near future, Amazon’s efficiencies may materialize in the form of same day or within hours or minutes distribution of physical goods via drone or other methods.
Considerations for Your Journey
In summary, becoming a data-driven organization has the potential to add incredible value to an organization and its customers. With expanding data volumes, advancing technologies, and changing industries, organizations must continue to pivot and adapt to their environments.
Leaning on our own experience, the following takeaways should be considered when pursuing a data-driven culture and strategy:
Engage or involve the organization’s key stakeholders in the strategy development and implementation processes. Gather their requirements, work to spread their voice across the enterprise, and give them opportunities to champion your initiatives to build organization-wide buy-in. Decentralize the ownership of your evolving, data-driven culture by encouraging analytical leaders to step up in their respective domains.
Don’t try to boil the ocean, and instead take a phased approach. Set explicit goals, that when met, bring the organization closer to meeting its long-term strategy and vision.
Invest in your human resources. Develop training/support functions that aim to increase data literacy. Design these programs and support functions to be both applicable and readily available to all individuals in the organization.
Be bold and innovative. A data-driven company is not afraid to overhaul its approach to a certain problem, or afraid to adapt to changes in its surroundings.
Seek help when help is needed. There are many organizations that have been down this path before that have experienced incredible outcomes. Approach your initiatives with humility and a willingness to learn.
At Emtiro Health, we are committed to providing bold solutions in a value-based health care environment. We support providers, systems, payers, and patients with unparalleled expertise and knowledge achieved through data and analytics. If you are interested in employing data analytics to improve performance at your health care organization, contact Emtiro Health to learn how we can partner to help your organization use data to drive quality performance